Hersey v. Vopava
251 Cal. Rptr. 3d 262
| Cal. Ct. App. 5th | 2019Background
- Tenant Alice Hersey sued landlord Stephen Vopava over alleged uninhabitable conditions (mold, odors) after she vacated; claimed personal injury, property loss, hotel costs, and other damages.
- Landlord made two Code of Civil Procedure § 998 offers: $10,000 (Sept 1, 2015) and $20,001 (July 5, 2017); both stated parties would bear their own costs and fees; Hersey rejected both.
- After a four-day bench trial, the court awarded Hersey $7,438 in damages (rent abatement and hotel costs) and deferred costs; Hersey did not timely appeal the August 31, 2017 damages judgment.
- On December 22, 2017 the trial court found the § 998 offers reasonable and in good faith, declared respondent the prevailing party, and awarded respondent $30,483.55 in attorney fees and costs; Hersey appealed from that post-judgment order.
- The principal appellate issue: whether the trial court properly calculated the “net” judgment for § 998 purposes (i.e., whether Hersey’s pre-offer costs and permitted attorney fees should be added to her damages when comparing to the offers), and thus whether she obtained a judgment more favorable than the offers.
Issues
| Issue | Plaintiff's Argument (Hersey) | Defendant's Argument (Vopava) | Held |
|---|---|---|---|
| Whether the appellate court can review Hersey's challenges to the underlying damages judgment | Hersey raised multiple challenges to the damages award and trial fairness on appeal from the post-judgment costs order | Vopava argued the damages judgment was final and not before the appellate court because no timely appeal was taken from the August 31 judgment | Court held it lacked jurisdiction to review the underlying damages judgment because Hersey did not timely appeal that final damages order; only the post-judgment costs/fee order is reviewable |
| Whether pre-offer costs and fees should be added to the damages award to determine if plaintiff obtained a more favorable judgment than the § 998 offers | Hersey argued pre-offer costs (and reasonable costs up to each offer date) and the contracted $500 attorney fee should be added to the $7,438 damages when comparing to both offers | Vopava argued costs/fees should be excluded (or frozen at first-offer date) and thus Hersey’s recovery was not more favorable than his offers | Court held pre-offer costs and attorney fees are included when determining whether plaintiff beat an offer; where plaintiff beat the first offer, costs reasonably incurred up to the second offer date must be included when comparing to the second offer; remanded to recalculate net judgment and, if necessary, reassess reasonableness/good faith of second offer and costs attributable after it |
| Whether the trial court abused discretion in finding offers reasonable and costs reasonable | Hersey challenged the trial court’s findings on reasonableness/good faith and reasonableness of respondent’s costs | Vopava defended the trial court’s findings and the award of fees/costs | Appellate court did not reach or decide these discretionary challenges on the merits; remand required to recalculate and then, if Hersey did not beat the second offer, court must reconsider those factual determinations |
Key Cases Cited
- Martinez v. Brownco Constr. Co., 56 Cal.4th 1014 (2013) (framework for handling multiple § 998 offers and purpose of the statute to encourage settlement)
- Martinez v. Eatlite One, Inc., 27 Cal.App.5th 1181 (2018) (preoffer costs are included in § 998 comparison; postoffer costs excluded)
- P R Burke Corp. v. Victor Valley Wastewater Reclamation Authority, 98 Cal.App.4th 1047 (2002) (an appeal from a postjudgment costs/fees order does not reopen time to appeal the underlying final judgment)
- Bank of San Pedro v. Superior Court, 3 Cal.4th 797 (1992) (§ 998 promotes settlement by shifting costs to party rejecting reasonable offers)
- Wilson v. Wal-Mart Stores, Inc., 72 Cal.App.4th 382 (1999) (prejudgment interest is not included as a cost for § 998 calculations)